I am expecting two forms of intervention. The first is FX intervention, which would establish a solid USDJPY floor between 145-55, and it would make sense for the US to participate. The second intervention will be aimed at the long end of the yield curve.

The BoJ has already committed to reduce Superlong JGB QT run-off pace from Q2-26 at the start of the next FY, which will help to ease secondary market supply pressure. Now, it is up to the MoF to provide some moral suasion to domestic long duration investors and convince them to make an AA shift with home bias for FY26.